Accounting › Section G · Fraud, internal controls, and cash › Topic G.3
Petty cash funds
Good cash control says every payment should go by cheque or electronic transfer with an approval, but nobody wants to raise a cheque for $9 of stamps. A petty cash fund handles small payments while keeping every dollar accounted for.
In this topic
- Why businesses keep petty cash
- The imprest system
- Establishing the fund
- Paying and replenishing
- Cash over and short
- Worked example: setting up and replenishing with a shortage
- Worked example: an overage, then a bigger fund
- Controls that keep petty cash honest
- Common mistakes to avoid
- Key takeaways
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